North Worsens Tropical Catastrophe

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, Sep 9 2025 (IPS) - Greenhouse gas (GHG) emissions have risen over the last two centuries, with current and accumulated emissions per capita from rich nations greatly exceeding those of the Global South.

Tropical vulnerability

The last six millennia have seen much higher ‘carrying capacities’, soil fertility, population densities, and urbanisation in the tropics than in the temperate zone.

Most of the world’s population lives in tropical and subtropical areas in developing nations, now increasingly threatened by planetary heating.

Different environments, geographies, ecologies and means affect vulnerability to planetary heating. Climate change’s effects vary considerably, especially between tropical and temperate regions.

Extreme weather events – cyclones, hurricanes, or typhoons – are generally much more severe in the tropics, which are also much more vulnerable to planetary heating.

Although they have emitted relatively less GHGs per capita, tropical developing countries must now adapt much more to planetary heating and its consequences.

Many rural livelihoods have become increasingly unviable, forcing ‘climate refugees’ to move away. Increasing numbers in the countryside have little choice but to leave.

Worse, economic and technological changes of recent decades have limited job creation in many developing countries, causing employment to fall further behind labour force growth.

Unequal development has also worsened climate injustice. Adaptation efforts are far more urgent in the tropics as planetary heating has damaged these regions much more.

Technological solutions?

While science may offer solutions, innovation has become increasingly commercialised for profit. Previously, developing countries could negotiate technology transfer agreements, but this option is becoming less available.

Strengthened intellectual property rights (IPRs) limit technology transfer, innovation, and development. The World Trade Organization (WTO) greatly increased the scope of IPRs in 1995 with its new Trade-Related Intellectual Property Rights (TRIPS) provisions.

Thus, access to technology depends increasingly on ability to pay and getting government permission, slowing climate action in the Global South. Financial constraints doubly handicap the worst off.

Despite rapidly mounting deaths due to the unprecedented COVID-19 pandemic, European governments refused to honour the West’s public health exception (PHE) concession in 2001 to restart WTO ministerial talks after the 1999 Seattle debacle.

Instead of implementing the TRIPS PHE as the pandemic quickly spread, Europeans dragged out negotiations until a poor compromise was reached years after the pandemic had been officially declared and millions had died worldwide.

With the second Trump administration withdrawing again from the World Health Organization (WHO) and cutting research funding, tropical threats will continue to dominate the WHO list of neglected diseases.

Climate finance inadequate

Citing the 2008 global financial crisis (GFC), rich nations claimed they could only afford to contribute a hundred billion dollars annually to climate finance for developing countries in line with the sustainable development principle of ‘common but differentiated responsibility’.

This hundred-billion-dollar promise was made before the 2009 Copenhagen Conference of the Parties (COP) to secure support for a significant new climate agreement after the US Senate rejected the Kyoto Protocol before the end of the 20th century.

Rich nations promised to raise their concessional climate finance contributions from 2020 after recovery from the recession following the GFC. However, official development assistance has declined while military spending pledges have risen sharply.

The rich OECD nations now claim that the hundred-billion-dollar climate finance promise has been met with some new ‘creative accounting’, including Italian government funding support for a commercial gelateria chain abroad!

In recent climate finance talks, Western governments increasingly insist that only mitigation funding should qualify as climate finance, claiming adaptation efforts do not slow planetary heating.

Meanwhile, reparations funds for ‘losses and damages’ remain embarrassingly low. Worse, in recent years, much of the West has abandoned specific promises to slow planetary heating.

Despite being among the greatest GHG emitters per capita, the USA has made the least progress. The two Trump administrations’ aggressive reversals of modest earlier US commitments have further reduced the negligible progress so far.

In late 2021, the Glasgow climate COP pledged to end coal burning for energy. But less than half a year later, the West abandoned this promise to block energy imports from Russia after it invaded Ukraine.

Concessional to commercial finance

Responding to developing countries’ demands for more financial resources on concessional terms to achieve the Sustainable Development Goals (SDGs) and address the climate crisis, World Bank president Jim Kim promoted the ‘from billions to trillions’ financing slogan.

The catchphrase was used to urge developing countries to take much more commercial loans as access to concessional finance declined and borrowing terms tightened.

With lower interest rates in the West due to unconventional monetary policies following the 2008 GFC, many developing nations increased borrowing until interest rates were sharply raised from early 2022.

Funds leaving developing countries in great haste precipitated widespread debt distress, especially in many poorer developing countries. Thus, purported market financial solutions compounded rather than mitigated the climate crisis.

Meanwhile, growing geopolitical hostilities, leading to what some consider a new Cold War, are accelerating planetary heating and further threatening tropical ecologies, rural livelihoods, and well-being.

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• Insider Exposé of ESG Greenwashing

• Beware Climate Finance Charade

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Available online at: North Worsens Tropical Catastrophe

Western Climate Hypocrisy Exposed by NATO Energy Policy

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, Mar 11 2025 (IPS) - NATO geopolitical strategy has now joined the ‘coalition’ of Western geoeconomic forces accelerating planetary heating, now led again by re-elected US President Donald Trump.

Industrial Revolution

Economic development is typically associated with the spread of industrialisation over the last two centuries. The Industrial Revolution involved greater energy use to increase productive capacities significantly.

Burning biomass and fossil fuels greatly expanded mechanical energy generation. The age of industry in the last two centuries has thus involved more hydrocarbon combustion to increase output.

Uneven development has also transformed population geography. Tropical soils were far more productive, enabling higher population-carrying capacities. Hence, during the Anthropocene over the last six millennia, human settlement was denser around the tropics.

Greater water availability enabled more botanical growth, supporting more fauna that was less subject to seasonal vicissitudes. If not undermined by aridification and desertification, much denser human settlements and populations became more viable in and near the tropics.

Meanwhile, industrialisation has been uneven. It was initially mainly located in the temperate West until after decolonisation following the Second World War (WW2).

However, post-WW2 industrialisation in the Global South was largely denounced as protectionist and inefficient until the East Asian miracles were better understood.

Sustainable development goals

The 1972 Stockholm Environment Summit helped catalyse public awareness of ecological and related vulnerabilities. The 1992 Rio Earth Summit promoted a more comprehensive approach centred on sustainable development.

The Millennium Development Goals (MDGs) were drafted in 2001 by a small group appointed by the UN Secretary-General. In sharp contrast, the formulation and greater legitimacy of the 17 Sustainable Development Goals (SDGs) required time-consuming widespread consultations.

Undoubtedly, many SDGs contain apparent contradictions, omissions, and unnecessary inclusions. While participatory processes tend to be messy and slow, genuine cooperation is impossible without inclusive consultation.

After decades, developing countries successfully secured recognition for the need to compensate for losses and damages, i.e., provide climate reparations, yet most prosperous countries have given nothing so far.

While mitigation is undoubtedly crucial for slowing planetary heating, resources for adaptation are urgently needed by all developing countries. Those located in the tropics have been more adversely affected.

Sustainable development should sustain ecology and human progress. Planetary heating should be curbed fairly to ensure those living precariously are not worse off.

Planetary heating

Thus, the neoliberal – and neocolonial – counter-revolution against development economics from the 1980s, with its insistence on trade liberalisation, deprived much of recently independent Africa and others of industry and food security.

The worst consequences of planetary heating are in the tropics, where populations are generally denser but poorer. European settler colonialism in temperate regions exacerbated this, blocking later immigration from the tropics.

Economic growth, higher productivity and living standards have been closely associated with more greenhouse gas (GHG) emissions in the last two centuries. Historical GHG accumulation now exacerbates planetary heating.

The New York Times has identified significant benefits of planetary heating for the US and, by extension, the Global North. Thus, the commitment of the temperate West to urgently address planetary heating remains suspect.

It claimed the melting Arctic ice cap would eventually allow inter-ocean shipping, even during winter, without using the Panama Canal, thus cutting marine transport costs. Planetary warming would also extend temperate zone summers, increasing plant and animal growth.

Sad tropics

Former central banker Mark Carney, then UN Special Envoy on Climate Action and Finance, has warned that average planetary temperatures will exceed the 1.5°C (degrees Celsius) threshold over pre-industrial levels in less than a decade.

This threshold was mainly demanded by tropical developing countries but opposed by the Global North, especially temperate European countries, who wanted it higher at 2°C. Planetary heating exacerbates poverty, with most of the world’s poor living in the tropics.

Adaptation to planetary warming is thus very urgent for developing nations. But most concessionary climate finance is earmarked for mitigation, ignoring urgent adaptation needs. Meanwhile, extreme weather events have become more common.

At least ten provinces in Vietnam now have seawater seeping into rice fields, reducing production. As rice is the main staple in Asia, higher prices will reduce its affordability, undermining the region’s food security.

War worsens planetary heating

The North Atlantic Treaty Organization (NATO) response to the Ukraine invasion has blocked Russian exports of oil and gas, strengthening the US monopoly of European fossil fuel imports.

With higher oil and gas prices, Europe has provided various energy price subsidies to ensure public support for the NATO war against Russia. The UK host secured a commitment to abandon coal at the Glasgow 26th UN climate Conference of Parties at the end of 2021.

As Mrs Thatcher had crushed the militant British coal mineworkers’ trade union in the 1980s, abandoning was easier for UK Conservatives. But the vow was soon abandoned, and coal mining in Europe revived to block cheap Russian oil and gas imports.

Thus, NATO’s energy strategy has exposed European climate hypocrisy, with the West abandoning its coal pledge for geopolitical and geoeconomic advantage. Such considerations have also undermined carbon markets’ ability to mitigate planetary heating.

Last year, the European Parliament voted to give Ukraine 0.25% of their national incomes while official OECD development assistance to the entire Global South has fallen to 0.3%! Burn, tropics, burn!

Related IPS Articles

• Net Zero by 2050 Delays Needed Urgent Climate Action

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• Can Carbon Trading Stop Global Heating?

• Climate Hypocrisy Ensures Global Warming

Available online here: Western Climate Hypocrisy Exposed by NATO Energy Policy

Can Private Finance Really Serve Humanity?

By Jomo Kwame Sundaram and Anis Chowdhury

KUALA LUMPUR and SYDNEY, Jul 14 2020 (IPS) - The recent explosion of private finance has nursed the hope, dream or illusion that it can be mobilized for the public good, e.g., to achieve the Sustainable Development Goals, associated with Agenda 2030. However, such hopes ignore how changes in financial investing have deeply transformed corporations, national economies and prospects for the world economy and social progress.

Private finance boom

Private capital has exploded with financial deregulation from the late 20th century. Global financeincreased 53% from 2000 to 2010, reaching some US$600 trillion (ten times annual world output), and was projected to reach US$900 trillion by the end of this year.

In its 2018 annual report, Principles for Responsible Investment (PRI) – an investor initiative in partnership with UN offices – estimated that investors with over US$80 trillion in combined assets had committed to integrate ‘environmental, social and governance’ (ESG) criteria into their investment decisions.

According to the IMF, between US$3 trillion and US$31 trillion in assets are managed by ESG funds, depending on the definition used. It also notes problems in evaluating ESG criteria, such as reducing emissions or raising labour standards, and hence fears ‘greenwashing’ financial investments with false claims of ESG compliance.

From active to passive investing

From 2006 to 2018, almost US$3,200 billion left actively managed equity funds globally, while over US$3,100 billion has gone into equity index funds, constituting “an unprecedented money mass-migration from active to passive funds”. The shift has given index providers considerable private authority and influence in global capital markets.

Mutual index funds have been available since the late 1970s, while the first exchange traded funds (ETFs) were launched in the early 1990s. The growth of passive or index funds has greatly accelerated in the decade since the global financial crisis (GFC).

Attracted by the much lower fees charged, passive fundshadUS$11.4 trillion globally by November 2019, five times more than in 2007. Jan Fichtner, Eelke Heemskerk and Johannes Petrydiscusssome implications of this money mass-migration to index funds for corporate governance, market competition and investment flows.

Wall Street’s new titans

Consequently, corporate ownership is increasingly concentrated and largely held by the ‘big three’ passive asset managers: BlackRock, Vanguard and State Street, already the largest owners of US corporations. In 2019, actively managed US funds were overtaken by passive funds. Some estimate that index funds will have over half the US capital market by 2024.

Describing passive investors as the true “titans of Wall Street”, Jill Fisch, Assaf Hamdani and Steven Solomon fear that passive investing’s rise raises new concerns about conflicts of interest due to ownership concentration and common ownership of rival firms, thus undermining competition.

In traditional investment funds, managers decide how and where to invest, e.g., which shares to buy. Instead of depending on fund managers, passive funds track selected constructed indices. This is increasingly done algorithmically, instead of reflecting or responding to price and other movements.

Index providers set standards

When investors invest via index funds, their decisions are effectively shaped by the indices the passive funds track. The three most influential index providers are the MSCI (Morgan Stanley Capital International), the FTSE (Financial Times Stock Exchange) Russell and the S&P (Standard and Poor) Dow Jones.

The main emerging markets indices have tremendous influence, particularly the MSCI Emerging Markets Index, which includes large and medium-sized companies in 26 countries, including China, India and Mexico. Thus, MSCI effectively sets criteria for countries aspiring to qualify as emerging markets, requiring financial authorities to ensure free access to and exit from national stock markets for foreign investors.

Deciding what to include in indices is not just an objective or technical matter, but inherently political and subjectively discretionary, typically benefiting some over others. Setting criteria for inclusion thus endows index providers with the authority and power to greatly influence regulation and policies.

Indices influence capital flows

In the past, index providers only supplied information to financial markets. But with passive funds, index providers have considerably more authority in markets. With trillions of dollars invested worldwide, capital has been reallocated by index providers’ decisions, as innocuous as they may seem.

These often influence international capital flows much more than economic fundamentals. Massive portfolio investments typically flow into the financial markets of countries chosen for inclusion.

When China was added to key emerging market indices in 2018, reportedly after heavy lobbying, it was expected to attract portfolio capital inflows of up to US$400 billion.

Adding Saudi Arabia to the benchmark MSCI emerging markets index in 2018 was expected to bring up to US$40 billion into its stock market. This did not materialize, perhaps due to the Jamal Khashoggi murder scandal, treated by financial markets as a ‘reputational risk’.

Thus, the big three’s indices greatly influence global investment flows. Meanwhile, investors may unwittingly acquire controversial or problematic investments, either by investing in index funds, or by choosing options heavily invested in such funds.

Divesting for progress?

Clearly, the three biggest passive fund managers and three major index providers greatly influence portfolio investment choices, while the world remains largely oblivious of their biases, influence and impacts, wishfully hoping for the best possible outcomes.

BlackRock, the world’s largest investor, with US$7 trillion in funds under its management, gained approving attention by announcing divestment of its actively managed funds from firms making more than a quarter of their revenue from coal.

But, as most BlackRock funds passively track indices, these continue to invest in coal until such stocks are removed from the indices. Moreover, its CEO has made clear that it will continue to invest in controversial assets, including coal.

Following BlackRock, Vanguard and State Street have also announced they will increase their ESG funds. But ESG criteria are defined, interpreted and acted upon by the index providers, who use different, often problematic and non-transparent methods and data.

UN ‘blue-washing’?

ESG-rating firms disagree about which companies qualify, producing different sets of ostensibly ESG compliant stocks. Meanwhile, the IMF has not found any consistent differences in rates of return between the investment portfolios of ESG funds compared to conventional ones.

In August 2019, Vanguard dropped 29 stocks, noting they had been ‘erroneously’ classified as ESG by FTSE Russell. The rejected stocks included a gun manufacturer, a private prison operator, a restaurant and a pharmaceutical company.

Neither Vanguard nor FTSE Russell explained how and why the ‘error’ had happened, or the criteria involved. Most ESG indices include ‘industry leaders’ in almost all, including the most controversial sectors, only excluding the very worst offenders, which are quite subjectively, if not arbitrarily determined.

The Economist has noted, “Tobacco and alcohol companies feature near the top of many ESG rankings. And many funds marketed on their green credentials invest in Big Oil…the scoring systems sometimes measure the wrong things and rely on patchy, out-of-date figures. Only half the 1,700-odd companies in the MSCI world index reveal their carbon emissions”.

Unless there are more meaningful and effective means to ensure that private finance equitably and appropriately serves public needs, indiscriminate UN endorsement of ostensible efforts to mobilise private finance for sustainable development runs the serious risk of legitimising a massive fraudulent exercise in financial ‘blue-washing’, referring to the colour of the UN flag.

Also available online at IPS.